When Price Is Greater Than Marginal Cost for a Firm

question 140

Multiple Choice

When price is greater than marginal cost for a firm in a competitive market,

• A) marginal cost must be falling.
• B) the firm must be minimizing its losses.
• C) there are opportunities to increase profit by increasing production.
• D) the firm should decrease output to maximize profit.

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Definitions:

Human Agency

The capacity of individuals to act independently and to make their own free choices.

Marx and Engels

Karl Marx and Friedrich Engels were 19th-century philosophers and economists known for their development of communist theory, criticizing capitalism and proposing a classless society.

Capitalism

An economic system characterized by private or corporate ownership of goods and the means to produce them, with the distribution of goods being determined mainly through competition in the marketplace.

Social Revolution

A profound, rapid, and often violent shift in the structure and nature of a society, typically involving the redistribution of power and resources.